Crawford & Co (CRD.A) 2016 Q1 法說會逐字稿

Good afternoon. My name is Vaneta, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Crawford & Company first-quarter 2016 Earnings Release conference call. In conjunction with this call, a supplementary financial presentation is available on our website at www.crawfordandcompany.com under the Investor Relations section.

(Operator Instructions)

As a reminder, ladies and gentlemen, this conference is being recorded today, Monday, May 9, 2016. I would now like to introduce Allen W Nelson, Crawford & Company's General Counsel and Chief Administrative Officer.

Thank you. Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties. These statements may include but are not limited to statements regarding the funded status of our defined benefit pension plans, our expectations related to future revenues and expenses, expectations regarding the timing, cost and synergies related to our Global Business Services Center, our acquisition of GAB Robins in the UK, as well as other restructuring activities, our long-term liquidity requirements and our ability to pay dividends in the future.

The Company's actual results achieved in future quarters could differ materially from results that may be implied by such forward-looking statements. The Company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the date of the call, or to reflect the occurrence of unanticipated events.

In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period. For complete discussion regarding factors which could affect the Company's financial performance, please refer to the Company's Form 10-Q for the quarter ended March 31, 2016, filed with the Securities and Exchange Commission, particularly, the information under the headings business, risk factors, legal proceedings, and management's discussion and analysis of financial condition and results of operation as well as subsequent Company filings with the SEC.

This presentation also includes certain non-GAAP financial measures as defined under SEC rules. As required, a reconciliation is provided for those measures to the most directly comparable GAAP measures.

Now I'd like to introduce Mr. Harsha Agadi, interim President and Chief Executive Officer of Crawford & Company. Harsha, you may begin our conference.

Good afternoon and welcome to our first quarter 2016 earnings call. Joining me today are Bruce Swain, our CFO, and Allen Nelson, our General Counsel and Chief Administrative Officer. After our prepared remarks, we will open the call for your questions.

Before I begin our review of the first quarter, I would like to acknowledge that Crawford & Company will be celebrating its 75th anniversary on May 27, 2016. May 27, 1941 is the day our founder, Mr. Jim Crawford, opened our doors for business. From humble beginnings in Columbus, Georgia, Crawford has grown to be the global leader in claims administration. We are extremely proud of our history and will be celebrating our anniversary all over the globe throughout 2016.

For the first quarter of 2016, we have delivered revenues before reimbursements of $277.2 million, which was below the $287.8 million that we achieved in the year-ago period. After adjusting for effects of foreign exchange, our revenues were flat as growth in our US services and Broadspire segments offset declines in our Garden City Group segment, which continues to be impacted by the expected runoff of several large projects.

More importantly, and it is exciting to state that consolidated operating earnings for the quarter more than doubled year-over-year to $21.7 million, as operating margins expanded significantly, rising by 400 basis points to 8%. This strong margin expansion was largely driven by our restructuring initiatives executed last year.

As we have said, our focus is to transform Crawford into a business with more predictable financial results and growth, regardless of market backdrop. The strong margin expansion that we achieved is a clear indication that our restructuring initiatives are positioning Crawford to achieve our goals. That said, we still have a significant opportunity to drive continued improvement in both cost efficiency and pace of client acquisition.

In an effort to provide more information and transparency on our corporate performance and the achievement of our goals, we are introducing a consolidated non-GAAP adjusted EBITDA measure, in addition to our existing performance metrics, and will include this within our guidance going forward. For the first quarter, we delivered adjusted EBITDA of $30.1 million, which is up 56% over the first quarter of 2015.

Looking at our first quarter results in more detail, our US services, international and Broadspire segments all showed solid improvement versus the year-ago period with margins and operating earnings all more than doubling. Our commitment to cost take-out and improved financial performance is evident and will continue as we remain relentlessly focused on improving the operations of the Company.

Our US services segment delivered 15% operating margins which compares to 7% in the first quarter of 2015. Expense reductions and Contractor Connection growth were the primary drivers of the improved performance. Contractor Connection benefited from the strong winter weather experienced across much of the US and remains an engine of growth for Crawford, with more opportunity for further expansion.

Today, Contractor Connection has a substantial share of the managed repair business that is outsourced by insurance carriers. Looking forward, we see two greenfield opportunities for incremental growth that we are actively pursuing. The first is the managed repair market that is in-sourced by insurance carriers and is about the same size as the outsourced market.

The second opportunity for expansion is a segment of the market where the contractor programs are not utilized. In this instance, insurance carriers simply cuts a check to the policyholder in order to have the damage repaired. This market opportunity is substantially larger than both the outsourced and in-sourced markets. While it is early, we are very excited with the significant growth opportunities that exist and look forward to updating you on our progress on subsequent calls.

Now, moving to our international segment, which experienced a strong rebound in profitability as operating margins tripled to 6% relative to the year-ago level, despite a contraction in revenues due to the stronger US dollar, which reduced international revenues by 9% or $11.3 million in the 2016 quarter. While margins did improve, they're not where they need to be.

A key area of focus for our management team is to deliver the international segment's target operating margins in excess of 10% during 2017, given the significant profit potential that exists. We are identifying both cost and revenue opportunities in order to deliver on this objective and are confident that we will succeed.

From a market perspective, we are extremely pleased to see claims volume pick up in the United Kingdom from the very depressed levels that we experienced through much of 2015. Additionally, we continue to identify opportunities to expand Contractor Connection through our international operations and believe the very successful model that we have developed in the United States and Canada is repeatable across the international segment of our business.

Our Broadspire segment had another strong quarter with robust revenue and earnings growth, driven by increased utilization in our medical management service line and higher average case values. Importantly, operating margins exceeded 11% given the continued benefits that Broadspire is experiencing from moving more of their business functions to our global business service center in Manila.

Looking to the balance of 2016, the outlook for Broadspire remains solid. In fact, Broadspire won a large public entity disability program in April, which is the largest disability account won since the product was introduced.

Turning to our Garden City Group segment, we recently announced the appointment of Kenneth Cutshaw as President and CEO. Ken stepped in on an interim basis in January and has done a terrific job so far. I am pleased that Ken will be taking this role on a permanent basis, as his extensive leadership experience across the legal profession as well as in the C suite and government services sector has been proving invaluable and opening many opportunities for business.

I am confident that Ken is the right person to lead Garden City as they manage through their new business environment. In fact, I can already see the strong positive impact that Ken's presence is having on the business as a culture of collaboration has taken hold. Garden City's client relationships are strong and represent opportunities for the many industry leading products that Crawford offers.

We have a number of solid wins, and levels of introduction and new sales opportunities have been impressive. Over time, this will be a nice tailwind for our growth.

In terms of Garden City results, the business remains a focus given the expected decline of large projects which should run their course through the balance of the year, thereby positioning GCG to return to growth in 2017. Importantly, GCG's competitive position and outlook remain very strong as evidenced by their current backlog, which stands at $103 million, essentially in line with their full year business plan and up from the fourth quarter level of $81 million. This provides good visibility into their financial results for the balance of the year.

I would like to conclude my comments with a few thoughts on the culture that we are instilling at Crawford. We are driving the mindset across our senior leadership that they need to be increasing shareholder value daily. There must be a fanatical focus on delivering value that is not just expense driven, but also growth driven, as we strive to deliver more predictable financial results, regardless of the market backdrop and weather.

Given that our business tends to have long lead times, it does take time to generate this incremental growth. That said, we are focused today on driving cross-sell opportunities across our business segments, developing new products, and identifying acquisitions to complement our existing product offerings, in order to plant the seeds that will deliver solid top line growth in 2017.

Our business leaders have embraced this and are actively collaborating to cross-sell their products today. The activity is strong, and I'm hopeful that we will begin to see this translate into new business wins through the year. We're also building a strong sales funnel for 2017 and beyond. From a new product perspective, we have identified market opportunities such as cyber security, where we're actively partnering with our insurance carrier clients to develop new products and services to bring to the market.

Lastly, I see the opportunities to strengthen several of our businesses through strategic acquisitions, where we are actively exploring opportunities today. Finally, we have made significant strides in bringing Crawford to a position where we can deliver more consistent and predictable financial results, regardless of weather. Our first quarter operating earnings growth is an important indicator of our early success and bodes well for the progress that we expect to make throughout 2016.

I am confident that this will position Crawford for the next phase of our strategic plan, which is returning the Company to top line growth in 2017. With that, I would like to turn the call to Bruce for a review of our financial results.

Thank you, Harsha. Company-wide revenues before reimbursements in the 2016 first quarter were $277.2 million, down 4% as compared with $287.8 million in the prior year's first quarter. The Company's selling, general and administrative expenses or SG&A totaled $56.8 million, down from $60.4 million in the prior year quarter.

As a percentage of revenues, these costs decreased to 20.5% of revenues in the 2016 first quarter from 21% of revenues in the prior year quarter. This decrease is primarily due to lower professional fees and reduced administrative compensation as a result of prior year cost reduction efforts.

During the 2016 first quarter, the Company recorded restructuring and special charges of $2.4 million or $0.03 per share after tax. These charges were for the -- were associated with the ongoing implementation of the global business and technology service centers, GAB Robins integration and other restructuring activities and operating and administrative areas around the world.

Our net income attributable to shareholders of Crawford & Company totaled $8.6 million in the 2016 first quarter, compared to net income of $3 million in the 2015 period. First quarter 2016 diluted earnings per share were $0.16 for CRDA and $0.14 for CRDB, compared to diluted earnings per share of $0.06 for CRDA and $0.04 for CRDB in the 2015 period.

On a non-GAAP basis, before restructuring cost and special charges, first quarter 2016 diluted earnings per share were $0.19 for CRDA and $0.17 for CRDB, compared to non-GAAP diluted earnings per share of $0.07 for CRDA and $0.05 for CRDB in the 2015 period. I will now review the first quarter performance of each of our business units, starting with the US services segment.

Revenues from the US services segment totaled $58.5 million, up 3% over the $56.7 million reported in last year's quarter. Operating earnings in our US services segment were $9.1 million in the 2016 first quarter, or 15% of revenues, more than doubling from operating earnings of $4.2 million or 7% of revenues in the prior year quarter.

Revenues generated by our catastrophe adjustors in the US totaled $14.5 million in the 2016 first quarter, down from $15.5 million in the 2015 quarter. International revenues decreased to $117.5 million from $124 million in the 2015 period primarily due to a stronger US dollar, which reduced revenues by 9% or $11.3 million during the 2016 first quarter.

On a constant dollar basis, international segment revenues increased by 4% in the 2016 first quarter. International operating earnings were $7 million during the current quarter as compared to last year's first quarter operating earnings of $2.3 million. The operating margin in this segment was 6% in the 2016 period, compared with 2% in the 2015 quarter.

Broadspire revenues increased to $76.2 million in the 2016 first quarter, up from $69.7 million in the prior year quarter, primarily as a result of increased utilization in our medical management service line and higher average case values in the 2016 period. Operating earnings in Broadspire totaled $8.7 million or 11% of revenues in the 2016 first quarter, increasing from operating earnings of $3.5 million or 5% of revenues in the 2015 first quarter.

Garden City Group revenues totaled $25 million in the 2016 first quarter, decreasing from $37.4 million in the prior year quarter. This revenue decrease was largely related to lower levels of work on certain large projects, which were continuing to wind down during the 2016 period. Operating earnings totaled $1.5 million in the 2016 first quarter or 6% of revenues, declining from $5 million or 13% of revenues in the prior year period.

The Company's cash and cash equivalent position at March 31, 2016 totaled $53.6 million as compared to $76.1 million at the 2015 year-end. Our investment in unbilled and billed receivables has increased by $4.1 million during the 2016 period. Pension liabilities decreased by $3.7 million, reflecting cash contributions made in the US and UK during the 2016 first quarter.

Our total debt decreased in the 2016 period by $8.1 million. Cash used in operations totaled $5.2 million for the 2016 first quarter, compared to $15.6 million used in the prior year. This improvement was primarily due to improved net income and lower payments for accrued liabilities.

Let me now review the reaffirmed and updated guidance for 2016. 2016 guidance includes the impact of restructuring cost related to the ongoing implementation of the global business and technology service centers and the completion of the GAB Robins integration.

In the aggregate, these 2016 charges are expected to total approximately $15.6 million pretax or $0.19 in diluted earnings per share after tax. In addition, we are now including guidance for non-GAAP adjusted EBITDA which is being introduced with this Earnings Release. Our 2016 guidance is as follows: consolidated revenues before reimbursements between $1.05 billion and $1.1 billion, consolidated operating earnings between $80 million and $90 million, consolidated adjusted EBITDA between $120 million and $130 million.

Before reflecting the restructuring costs, net income attributable to shareholders of Crawford & Company on a non-GAAP basis between $36 million and $42 million, or $0.67 to $0.77 per CRDA share and $0.59 to $0.69 diluted earnings per CRDB share. After the restructuring charges net income attributable to shareholders of Crawford & Company between $24 million and $30 million or $0.48 to $0.58 per diluted CRDA share and $0.40 to $0.50 per diluted CRDB share.

With that, I would like to turn the call back to Harsha for concluding remarks.

Thank you, Bruce. And thank you all for joining our call this afternoon. I remain excited about the progress that we have made over a very short period of time. Our expense reduction plan directly contributed to the strong margin expansion experienced this quarter and has provided clear visibility for the balance of the year.

Our international segment is showing real signs of improvement, and Ken Cutshaw has done a nice job bringing leadership and stability to the Garden City Group business. The foundation is clearly in place for Crawford's continued margin improvement through continued innovation, and we do expect more predictable financial results looking forward. Our focus has now turned towards organic growth opportunity and strategic M&A to return Crawford to the top line growth in 2017.

Ladies and gentlemen, I look at this as the beginning of the next 75 years of Crawford & Company. Operator, please open the call to questions.

(Operator Instructions)

Your first question comes from the line of Mark Hughes with SunTrust.

Thank you. Good afternoon. Congratulations on the quarter.

Thank you, Mark.

You had suggested you think the Contractor Connection business model would be translateable into other markets, other international markets. Could you talk a little bit more about that, why you think they're suitable for that business?

Absolutely. I think some of our developed -- very developed economies like Canada, like the United Kingdom, like Australia are sterling examples where a similar product need exists for insurance carriers to have an immediate solution. And so we provide that.

We've already launched it in these markets, and they're starting to ramp. And we should start seeing growth in these areas and obviously we're taking the outsource first. Then we shall go after the in-sourced market and eventually we'll go even beyond that, if you will, into the consumer space step by step.

So I think these large markets are very similar to the United States.

Are there competitors similar to Contractor Connection that already exist, or is this a new service offering?

The good news is there are tiny competitors in these markets. So as we roll with our muscle, we will go to number one position rather quickly, and I haven't looked at exactly what our position in Australia is, but I think we're already number one in Australia, but more to ramp up.

The other is my conversations with our clients, primarily insurance carriers, they are asking us to provide these services in multiple geographies. So this is very positive where the CEO of an insurance Company or a head of claims is like, hey, can we have this product also in these markets that you provide us in the US? So there is a natural alignment between us and the clients to go into this space.

Can you talk about the sales funnel or sales pipeline at the Broadspire, you had mentioned you had just signed your largest disability account since the product was introduced. How are you feeling about growth prospects going forward at Broadspire?

Very excited about it. They have a very strong sales funnel, and they're driving it on two fronts simultaneously when you look at it on a product basis. So they have new customers they've actually signed up in the workers' comp space, and these are some large customers, I'd say in the Fortune 50.

Simultaneously we have new customers added on, if you will, in the disability claim. The other piece I should state is our CEO at Broadspire is super aggressive. Daniel Lisenbey who is not holding back and, if you will, maximizing on the cross-selling opportunities that benefits both Broadspire as well as Crawford.

So we're moving on all fronts. So you should see more and more lift coming out of Broadspire over time.

Let's talk about the Garden City, the margin relatively -- kind of flat, slightly positive margin. Where can that go as this kind of revenue run rate or as these new -- the older big projects are running off, how much opportunity is there to boost the bottom line us just through internal action or do you need more top line growth?

Here's what I would say. If the business is steady, Garden City's margin performance should be really no different than some of the other segments and should run into the double-digit zone. Having said that, they're battling, if you will, with two large contracts that are winding down, but Ken, who heads Garden City, has started to wind up new business. And in addition, he's actually started to bring in, if you will, government agency business.

He is cost fixated. He has found opportunities, and I think there is significant opportunity in Garden City to either hold or even inflect margins upward. We might see a temporary slowdown in the margins, but it will quickly turn around and start going up, because it's not necessarily revenue dependent, but it will be over long periods of time.

As revenue increases, margins increase in any business.

And then the international segment, substantial improvement year-over-year. How good a line of sight do you have for sustained improvement in that business?

Very clear line of sight. As I stated earlier, their margins have tripled and if you remember, I also said there's still room to improve, which means we are having enough confidence that in the next year we should try to move into the double-digit margin space. Two things are happening.

One is they're obviously starting to tighten their cost and increase their efficiency, and, frankly, they're pushing technology heavier than in other places to innovate certain tasks. But the second is, client acquisition is on in the traditional spaces, so their sales funnel is also very active at the moment, and so they're moving simultaneously.

You should see clearly in 2016 a significant turnaround of international and Q1 is, if you will, the tip of the iceberg as we move forward, and over time the margins also will start moving up.

Thank you.

Your next question comes from the line of Greg Peters with Raymond James.

Good afternoon and thank you for hosting the call and also thank you for the additional disclosure around EBITDA. I think that's very helpful.

Thank you.

Just as we think about EBITDA and then GAAP earnings, obviously restructuring has been a major component of the story in the last several quarters. But you seem to infer from your comments that we've turned the corner on that. What can we think about in terms of restructuring costs and expenses over the next several quarters?

Well, hey, Greg, this is Bruce. Within our guidance, we're talking about restructuring costs this year of $15.6 million. That's related to the continued migration of functions into the global business service center in Manila and also the establishment of a global technology service center in India. Those are going to be the two big drivers of that cost.

Right.

The other element that we have is the finalization of the GAB Robins integration in the UK. So for the first three months we've incurred $2.4 million, and we'll have a bit to go over the next three quarters to get to the $15 million.

Bruce, do you anticipate that there's going to be any sort of one quarter's going to be heavier than another, or should we look at the balance of the $15.6 million and say it's going to be spread out evenly over the next couple quarters?

You might see it a little bit more bunched up in Q2 and in Q3.

Okay. And then when you get through this year and you think about additional or leftover restructuring, what should we think about in 2017 for restructuring? Is it going to -- are you still going to have some lingering charges, or are you going to be you through the vast majority of them by then?

We'll be through the vast majority, but we're going to have some cost that drags into 2017 for the offshoring that we're doing.

The global technical service center.

Right. At this point we're not ready to put a number on that right now.

Okay. That's fair. Harsha, I just wanted to go back, I know Mark asked a lot of questions, on the Garden City Group I think you said you have a backlog of about $103 million.

Correct.

In revenue. And yet you also almost in the sentence before or same sentence talk about a couple of big contracts that are rolling off. What should we think about that $103 million of backlog? Is that -- what's the business mix look like on that, and is there a risk that there could be -- that's one time project work that could fall off in the following year?

So here's what I'll say. The nature of Garden City's business is if you look at certain pieces like a cross action, it is many a time one-time, but it goes into several years, and it's not like a one month hit. Or you can have sometimes four to five years, and it goes for a while.

So backlog is a clear indication that the current management team under the leadership of Ken Cutshaw is truly being very good at selling their products and services and actually gaining ground clearly over the previous management team's leadership. The $103 million at the end of Q1 is higher than the fourth quarter as you remember. We made a change.

Right.

In the leadership, where the four individuals left giving us no choice. It was on their own accord that we had to bring in, if you will, Ken Cutshaw as interim. So having said that, what I would say is the backlog will continue to grow that will give an indication that revenue over time will stabilize and actually will start growing. As these large cases peter down, the backlog is going to start kicking in, and it will more than offset over time.

Now, we're obviously looking at quarter by quarter, month by month as we're forecasting. So Ken is very focused on where the number will come down and eventually go up. But I think this is not something we should be concerned about. I would be concerned if the backlog is not growing. So to me, that is a big, big deal.

Yes, indeed. Thank you for the color. One final area. On free cash flow, I like the slide presentation that you have there for the -- in the investor call slide deck here. I'm wondering if you can talk about the seasonality of free cash flow as it occurs over the course of a year.

Right. Before we get into the seasonality, and I'm going to have Bruce talk about it as well a little bit, but I just wanted to make clear, going back to GCG, that the senior team that is there is pretty much intact, and it is the senior team that has been there for years and now led by Ken. Together they have built this pipeline in Q1 quite successfully.

So the collaboration, the melding together, et cetera, et cetera, is making a big difference and, frankly, I think some of you guys were concerned when the four individuals who were running GCG left us with no choice, and we had to go bring in leadership. It looks like the situation is stabilized.

Yes, Harsha, real quick on that point. How long had Ken been with GCG before his promotion?

He was there from the beginning of the year, but he started transitioning with the four individuals who were leaving I'm going to say about six weeks before the year ended, and -- this is before 2015 ended, continued as -- then he became interim CEO in the beginning of the year and recently became the permanent CEO. So we've gone through careful steps as we got this done.

The other thing, I think going back to seasonality, here's a very interesting thing. Q1, historically has been a much lower number seasonally especially from an earnings perspective. And 2016 has started out so strong that Q1 has actually been I mean, nothing short of a blockbuster quarter.

So we're starting out very strong and maybe unlike maybe some management teams which tend to do the hockey stick, we're actually avoiding the hockey stick by starting at a fairly high level so that we're in good shape to not meet guidance, we really want to exceed guidance.

But having said that, I think I'm going to have Bruce talk about one is the cash flow as well as the seasonal impact that the business itself had.

Sure. So getting to your question, Greg, on seasonality of cash flow, in the first quarter it's typically our weakest quarter in terms of cash generation. We are normally negative in terms of operating cash flow in the first quarter due to a number of large expenses that will come in at the beginning of the year, payment of bonuses, payment of 401-K matches, pension contributions and the like.

And then that builds in the second, third and fourth quarters. So as we look forward throughout the rest of this year, we would expect for our operating cash flow to build to healthy levels.

Perfect. Thank you for all that color. I appreciate it.

And this question is from the line of Joel Salomon with SaLaurMor Capital.

Hi, thanks, guys, for taking my call and great quarter. Just had a couple of questions about what's been going on in the current quarter, if you could talk about there's been a number of events, the Fort McMurray, the fires, which I guess Intact today said they're going to have a pretty substantial event.

One analyst said that implies a $3 billion plus insured loss, and then there was obviously the Japan earthquake, and there's been a lot of Texas storms. Anything that you can talk about any of those events, are you involved in any of those events?

So, here's what I will say. You're obviously watching the market. Clearly, we are involved in every one of the events you've mentioned. The Canada one is the most recent. The bush fire is so large, it is the size of Manhattan.

What I have understood is actually the losses are higher, probably $6 billion to $7 billion US, so it's a substantial loss. I'm pleased to say that the insurance carriers, their first outsourced call has been to Crawford & Company, and we are fully supporting our clients. And not only that, we have the US as well as our international segments supporting the Canadian team very, very actively in providing the necessary people so that ramp-up time is minimum. The area is cordoned off.

It is Canadian military controlling the area right now. But as soon as they open the gates, we will be some of the first ones to go there and actually help solve the claims.

I should take a moment and say that Crawford & Company has stepped up to contribute money to the Canadian Red Cross, in addition as of last night, every Crawford employee, about 9,000 employees across the globe, have been offered to contribute towards the Canadian Red Cross for this, and the Company will match dollar for dollar for every employee contribution.

This is the time when Crawford shines the best. This is what we do for a living. And we have full intentions of participating heavily to solve this crisis, if you will, for the people in Fort McMurray as well as the insurance carriers. I will also say this. Bruce can acknowledge if he agrees, is that this is not part of our guidance.

Anything else on the other events, Japan or the Texas hail storms and thanks for the color there.

Texas hail storms we obviously is in our spot here, and we are participating. The Japan earthquake is a little different. We are participating to some extent, but they also have a slightly different way in terms of how the carriers work and in terms of how they in-source in Japan as opposed to outsource. So that's a little different than, say, the Canada or the Texas.

Great.

I'm familiar enough with Japan to tell you what I'm telling you.

Right. Well, thanks for the color. On Contractor Connection, that's great hear the expansion to international. Anything you can talk about in terms of the US, the growth in terms of the number of contractors that you have on contract now compared to last year. I think you were under 4800 or so like that. Could you talk about where you are today?

Right. We have clearly crossed I think about 5,500 contractors. Our system revenues, which is the amount of work or billing that the contractors are doing is growing literally leaps and bounds. So it is moving fast, and the growth rate is so real that the numbers are changing by the week, in all cases upward.

So we are clearly our numbers will show that the growth is there. Carriers love Contractor Connection. Larry Thomas and team do a very fine job in making sure these guys are credentialed. They're of high quality and the job gets done in time, and [EMUS] international is doing the same with Contractor Connection across the globe.

Great. Great to hear. Thanks, Harsha. Just finally, Greg's asked this in the past, and I'd like to ask the question again. You've done a great job here in such a short time. Has there been any change, or when do you think the interim title will be removed and you can be a permanent CEO?

Well, so here's how I'd answer it. I think the credit really for the performance goes to the executive team of Crawford more than the interim CEO. This is relatively the same team, and they have done a stupendous job in guiding the Company in the results that are spectacular.

It is the Board's job as I said in the last quarter call that will make the call finally on a permanent CEO. The search is extremely active. It is being run by an internationally recognized search firm, and we will draw a close to the search we think between six and nine weeks, and we will be in a position to announce the permanent CEO.

My role as interim CEO I live it every day, committed to it every day, and I would say the team has said he's an acquired taste. We'll get along with him. So having said that, I think whether it is me, or whether it is somebody else, we'll know that in six to nine weeks. But the results clearly look quite positive.

Great. Thanks for the color and comments, Harsha. Appreciate it.

Thank you.

And there are no further questions. Mr. Agadi, are there any closing remarks?

Yes. I think my closing statement is we remain superbly excited about Crawford & Company. The team at Crawford has done a solid job in Q1, and as you can see, the direction we're pointed is straight north in terms of performance, and we continue to look very optimistically and positively to the growth in revenue as well as earnings. Thank you. Good-bye and God bless.

Thank you for participating in today's Crawford & Company conference call. This call will be available for replay beginning at 6 PM today, through 11:59 PM on June 9, 2016. The conference ID number for the replay is 90680887. The number to dial for the replay is 1-855-859-2056 or 404-537-3406. Thank you. You may now disconnect.